Navigating Retirement in a Shifting Economy
How Tariffs, Trade Wars, and Federal Policies Impact RMDs and Roth IRAs
As 2025 unfolds, the global economic landscape continues to present new challenges for retirees. Market volatility, trade disputes, and shifting federal policies have all introduced fresh risks—particularly for those managing IRAs, 401(k)s, and non-qualified retirement accounts.
At Agemy Financial Strategies, with offices in Connecticut and Colorado, we’re committed to helping retirees protect and preserve their wealth, especially during uncertain times. This week, we’re breaking down seven key areas every retiree should know to weather this economic storm and maintain control over their financial future.
1. Roth Conversion Success in a Down Market
Market downturns can be a hidden opportunity—particularly for Roth conversions. When your traditional IRA or 401(k) is temporarily reduced in value, converting those assets into a Roth IRA can result in a lower tax burden. Once in a Roth, your assets grow tax-free, and future withdrawals are tax-free as well.
🧠 Tip: Roth conversions are even more powerful when paired with a long-term strategy for managing tax brackets, Social Security timing, and RMD coordination. Listen to our Financial Strategies podcast on ‘Roth IRAs Rebooted’, here.
2. SECURE Act 2.0: What You Need to Know
Effective January 1, 2023, the SECURE Act 2.0 introduced sweeping changes to retirement planning. Key updates include:
- RMD age increase: Now 73 (and rising to 75 in 2033), giving retirees more time to grow their assets tax-deferred.
- Higher catch-up contributions: Those aged 60–63 can now contribute more to retirement accounts.
- Auto-enrollment in 401(k)s: New employer plans must auto-enroll eligible employees.
🔍 Strategy: Use the extended RMD window to explore Roth conversions and reduce future tax liabilities.
3. New 2025 RMD Table: How to Calculate Correctly
The IRS has updated its RMD tables to reflect longer life expectancies. That means lower annual withdrawal amounts, which can help your portfolio last longer—but only if you calculate correctly.
How It Works: Divide your retirement account balance as of December 31 of the previous year by the life expectancy factor from the IRS table.
📌 Penalty Alert: Missing or miscalculating your RMD can result in a 25% excise tax penalty—a costly mistake that can be avoided with proper planning.
4. Avoid the 25% RMD Penalty Pitfall
Under the SECURE Act 2.0, the old 50% penalty for missed RMDs has been reduced to 25%—and even 10% if corrected quickly. But prevention is the best strategy.
✔️ Action Step: Work with a fiduciary advisor to ensure you’re using the correct RMD tables and timing to avoid this penalty altogether.
5. Beneficiary Designation Tips: Stretch IRAs and 401(k)s
Thanks to recent changes, inherited retirement accounts now follow a 10-year rule—eliminating the lifetime “stretch” for many beneficiaries.
What You Should Do:
- Review all beneficiary designations annually
- Consider naming a trust for complex family situations
- Understand how SECURE Act rules affect inherited IRAs and 401(k)s
🏛️Estate Tip: Improper beneficiary planning can result in unnecessary taxes or legal battles.
6. Navigating Tariffs, Trade Wars, and Federal Policy Risks
Tariffs and trade conflicts can ripple through markets, impacting retirement portfolios in unexpected ways. Retirees with heavy exposure to international equities or manufacturing sectors may feel the brunt of these shifts.
🔄 Mitigation Strategy: Diversify across sectors and asset classes. Ensure your portfolio is flexible enough to respond to federal policy changes, such as interest rate hikes or economic stimulus measures.
7. Customized Retirement Portfolio Allocation Built for Today’s Economy
At Agemy Financial Strategies, we understand that today’s retirees need more than generic advice—they need a customized investment approach that evolves with the economy. That’s why we’ve spent over 35 years helping clients safeguard their savings with forward-thinking, tax-efficient, and risk-conscious portfolio strategies.
In 2025, market conditions are more unpredictable than ever—shaped by trade tensions, inflation, and federal policy shifts. Our fiduciary-led firm and financial strategies are specifically designed to weather these changes, helping protect your wealth while generating the income you need to enjoy retirement.
Here’s how we can help:
- Tailored Portfolio Construction: We work with you to align your investments with your risk tolerance, income goals, and legacy wishes.
- Market-Adaptive Strategies: Our team proactively adjusts portfolios based on real-time economic shifts, including interest rate hikes, policy changes, and trade disruptions.
- Income Planning: We help turn your accumulated assets into a reliable stream of retirement income—monthly, quarterly, or annually—so you never have to guess where your next paycheck is coming from.
- Tax Efficiency: From Roth conversions to RMD strategies, we build your retirement plan with tax-smart moves that can help preserve more of your nest egg.
- Personalized Guidance: Whether you’re in Connecticut or Colorado, our fiduciary advisors are here to provide clarity, confidence, and care every step of the way.
Bonus: What Investment Tools Support Your Income Goals?
Choosing the right mix of retirement tools can help turn your savings into dependable monthly, semi-annual, or annual income—while addressing risks like longevity and market downturns.
Consider:
- Certain annuities (not all annuities are built the same, so ensure you speak to your trusted advisor about risk tolerance and types of annuities before committing. Watch our YouTube show dedicated to annuities here.)
- Dividend-paying funds
- Tax-free municipal bonds
- Structured notes (for defined-risk strategies)
Remember: Not all investment tools are suitable for every retiree—customization is key.
Final Thoughts: Take Control in Uncertain Times
As we celebrate 35 years of excellence, we remain as committed as ever to helping you thrive in retirement—no matter what the markets do next.
Retirement planning in 2025 is not about guessing—it’s about strategic decision-making based on real data, legal changes, and global events. From tariffs and trade wars to federal policy shifts and market volatility, today’s retirees face a lot of moving pieces.
But with the right plan—and the right partner—you can turn complexity into clarity.
Book your consultation today and let us help you protect your future with precision, purpose, and fiduciary care.
Frequently Asked Questions (FAQs)
Q: How do tariffs affect my retirement investments?
A: Tariffs can trigger market sell-offs, particularly in sectors like manufacturing or global trade. Diversifying your portfolio and rebalancing regularly can help reduce exposure.
Q: What’s the benefit of Roth conversions during a market dip?
A: You convert assets at a lower value, potentially lowering the tax cost and maximizing long-term tax-free growth.
Q: How often should I check my RMD calculation?
A: Annually. Your balance and life expectancy factor will change each year, affecting your required distribution amount.
Q: Can I avoid the RMD penalty?
A: Yes. Filing a timely correction and working with a fiduciary advisor to track RMDs can help you avoid or reduce penalties.
Q: What makes Agemy Financial Strategies different?
A: As fiduciaries, we’re legally obligated to act in your best interest. Our customized strategies focus on wealth preservation, income generation, and long-term success in any market condition.
Disclaimer: This content is for educational purposes only and should not be considered financial or investment advice. Please consult with the fiduciary advisors at Agemy Financial Strategies before making any investment decisions.
